Withholding Tax on Resident: Payment of Rental/Lease of Movable and Immovable Property
Rental on movable and immovable property is subject to withholding tax (WHT) at 10%. Withholding tax on property will tax both individual and legal entities.
Movable Properties:
Movable properties refer properties that can be moved from place to another place.
Examples for movable properties are as follows:
- Office equipment: computer, printer, scanner, machine copy etc.
- Office furniture: table, chair etc.
- Other movable properties: car, motor, truck, etc.
Example 1:
ABC Company rent machine copy of $220 per month.
Required:
- Calculate WHT if ABC Company rent from individual.
- Calculate WHT if ABC Company rent from real regime company that issued proper invoice including VAT.
Solution:
1.Calculate WHT if ABC Company rent from individual.
WHT = $220 x 10%=$22
Withholding tax on machine copy rental is $22.
2.Calculate WHT if ABC Company rent from real regime company that issued proper invoice including VAT.
Amount before VAT = 220/1.1=$200
WHT = $200 x 10%=$20.
Withholding tax on machine copy rental is $20.
Immovable Properties:
Immovable properties refer properties that cannot be moved from place to another place.
Examples for immovable properties are as follows:
- Land
- Building
- Land and building
Example 2:
ABC Company rent the following properties from different lessees:
- Office from company of $1,100 including VAT.
- Land of $500 from individual.
Required:
Calculate withholding tax (WHT) on property rental.
Solution:
Amount before VAT for office rental = $1,100/1.1=$1,000
WHT base = $1,000 + $500=$1,500
WHT = $1,500 x 10%=$150
Withholding tax on property rental is $150.